HomeMy WebLinkAboutCAO 02-19--Ci/pof--PJ(KERJNG From: Tony Prevedel Chief Administrative Officer Report to Council Report Number: CAO 02-19 Date: January 28, 2019 Subject: Additional Cost of Municipal Services Design for the Pickering Innovation Corridor -Seaton Community -File: A-1440 Recommendation: 1. That the additional fee proposal submitted by Sabourin Kimble & Associates Ltd. in the amount of $270,000.00 (plus HST) for the change in scope of work to undertake the necessary studies and design work associated with the provisions of the municipal services for the Kubota Canada Ltd. site and other lands within the Pickering Innovation Corridor be accepted, in accordance with the Purchasing Policy 10.03 (c), as the assignment is above $50,000.00; 2. That the total net project cost of $610,560.00 be revised to $875,136.00 (net of HST rebate) be approved; 3. That the Director, Finance & Treasurer be authorized to fund the revised net project cost of $875,136.00 from Capital Budget account 5203.1802.6265; and 4. That the appropriate officials of the City of Pickering be authorized to take the necessary actions as indicated in this report. Executive Summary: The 2018 Capital Budget included funding for project management services and to undertake the necessary studies and design work associated with the provisions of municipal services for the Kubota Canada Ltd. site and other lands within the Pickering Innovation Corridor. Council endorsed Report CAO 04-18 at the May 14, 2018 Council Meeting and approved the hiring of Sabourin Kimble & Associates Ltd. (SKA) for an estimated project cost of $600,000.00 (plus HST); a net project cost of $610,560.00 (net of HST rebate). In order to meet Kubota Canada Ltd.'s schedule, staff needed to retain the project management and engineering services to not only complete the time sensitive environmental studies, but also fully understand the work involved in getting the Kubota site ready for development. The original scope of work did not include the broader engineering work required for the entire phase one employment lands corridor, specifically road works for Highway 7 and Sideline 24. Furthermore, the original project scope of work could not quantify all of the required engineering services necessary for the entire block. To this end, SKA has identified several additional environmental and engineering tasks that would be necessary to support not only Kubota's development, but also the other development projects that have been committed.
CAO 02-19 Subject: Additional Cost of Municipal Services Design for the Pickering Innovation Corridor Seaton Community Financial Implications: 1. Original Proposal Amount Original Proposal Amount Scope of work -Engineering Services HST (13%) Total 2. Estimated Project Costing Summary Original Proposal Amount Additional change in scope of work Additional engineering design Additional surveying services Geotechnical services Archeological services Geomorphology services Electrical engineering services Landscape architecture services Cost allocation consulting services Total additional change in scope of work Subtotal -Revised Gross Project Cost HST (13%) Total Revised Gross Project Cost HST rebate (11.24%) Total Net Project Cost January 28, 2019 Page 2 $590,000.00 . 76,700.00 $666. 700.00 $590,000.00 50,000.00 30,000.00 80,000.00 15,000.00 15,090.00 40,000.00 20,000.00 20,000.00 $270,000.00 $860,000.00 111,800.00 $971,800.00 . (96,664.00) $875.136.00 The above costs are for design only. The 2019 Capital Budget will include funding ($11.0 million) to undertake the construction of the municipal services to the landowners' site. The City plans to enter into cost sharing agreements with the various benefiting landowners to offset these costs where applicable. Discussion: In April 2018, the City announced four major development projects for the Pickering Innovation Corridor: Kubota Canada Ltd., the Behar Group, Red Crest and Best Homes Canada. All four developments will be situated on the north side of Highway 407, between Sideline 26 (future Whites Road) and Sideline 22 (future Peter Matthews Boulevard). Kubota Canada Ltd. plans to construct a 500,000 square foot industrial building, along with 65,000 square feet of office space for its Canadian Headquarters. Its project team has met with City officials and has outlined a very aggressive timeline to construct and relocate its operations to
CAO 02-19 January 28, 2019 Subject: Additional Cost of Municipal Services Design for the Pickering Innovation Corridor Seaton Community Page 3 Pickering. City staff have also met with the three other investors to understand their development plans and to coordinate the appropriate project timelines. In order to accommodate the project timelines for Kubota Canada Ltd. and the other users on the north side of Highway 407, the City initiated the appropriate environmental and engineering work required by the City, Region of Durham, Ministry of Transportation, Ministry of Natural Resources & Forestry, Toronto and Region Conservation Authority and Infrastructure Ontario. On May 14, 2018, City Council approved the hiring of SKA, through the endorsement of Report CAO 04-18 (Attachment #1) to undertake the necessary environmental and engineering work required to get Kubota's site 'shovel ready' for development. Since May 2018, the SKA team has been working closely with City staff, various levels of government, and outside agencies to expedite the necessary work that needs to be completed for Kubota Canada Ltd. Due to the high level of work involved that impacts not only the Kubota lands, but also the future development sites adjacent to Kubota property, SKA met with City officials to discuss the need to increase the scope of services, allowing them to meet the various requirements and deadlines with all parties involved. Detailed Engineering Design: The change of scope now includes all of the required municipal services, including road improvements to Highway 7 and Sideline 24. Surveying Services: Within the additional engineering work involved with Highway 7 and the lands east of Kubota, there will now be a new set of legal and topographical assignments required for this project. Geotechnical and Archeological Services: Since the scope of work for engineering design has been confirmed, geotechnical services will now be required. Geomorphology Services: Now that the design work has been completed for the Kubota Drive culvert, and the watermain and sewer crossings of the Natural Heritage System, the consulting team needs to complete the necessary geomorphology work for the Corridor. Electrical Engineering Services: This will include hydro pole relocations on Highway No. 7, Sideline 24, the design work for the signalized intersection of Highway 7 and Sideline 24, and the necessary street lighting on Highway No. 7, Sideline 24, and Kubota Drive.
CAO 02-19 Subject: Additional Costs of Municipal Services Design for the Pickering Innovation Corridor Seaton Community Landscape Architecture Services: January 28, 2019 Page 4 This is now being added to the scope of work and includes the detailed landscape architectural design of the storm water management pond and street trees on Kubota Drive. Cost Allocation Services: In order to determine the cost allocation of various services to each development ready parcel, it is recommended that SKA select the most appropriate method to identify and calculate the cost allocation amounts in order for the City to recover costs. To this end, SKA submitted a proposal dated December 3, 2018 (Attachment #2) outlining the scope changes and the additional fees of $270,000.00 (plus HST) required to address them. City Staff recommends acceptance of the additional fee proposal from SKA for the change in scope of services for the design of municipal services in the Pickering Innovation Corridor in the amount of $270,000.00 (plus HST) and recommends that a total revised budget of $860,000.00 (plus HST) be approved. Attachments: 1. Report CAO 04-18 2. Sabourin Kimble & Associates Ltd. Proposal dated December 3, 2018
CAO 02-19 January 28, 2019 Subject: Additional Cost of Municipal Services Design for the Pickering Innovation Corridor Seaton Community Page 5 Fiaz Jadoon Manager, Economic Development & Strategic Projects FJ:mjh Recommended for the consideration Approved/Endorsed By: Richard Holborn, P.Eng. Director, Engineering Services Stan Karwowski, MBA, CPA, CMA Director, Finance & Treasurer of Pickering C~ ~-'.2.l, '2.0{°( Tony Prevedel, P.Eng. Chief Administrative Officer
-c~.0f-PlCKER·1NG i_ .. *, '• ,.,.,~ ATTACHMENT ti j_ TO REPORT #pj~ Report to Council Report Number: CAO 04-18 bate: May 14, 2018 From: Subject: T any Prevedel Chief Administrative Officer Municipal Services Design for the Pickering Innovation Corridor Seaton Community File: A-1440 Recommendation: 1. That Council approve the hiring of Sabourin, Kimble & Associates Ltd. to provide project management _services and undertake the necessary studies· and design work associated with the provision of municipal services for the Kubota Canada Ltd. site and other lands within the Pickering Innovation Corridor, in a·ccordance with Purchasing Policy 10.03 (c) as the assignment is above $50,000; · 2. That an upset limit of $600,000 plus HST be provided to finalize an agreement with Sabourin, Kimble & Associates Ltd. in order to meet Kubota Canada Ltd.'s required schedule; 3. That the total _gross project cos_t of $600,000 plus HST be approved; 4. That Council authorize the Director, Finance & Treasurer to finance the net project cost from capital account 5203.1802.6265; 5. That City staff be authorized to commence negotiations in order to finalize an agreement with Sabourin, Kimble & Associates Ltd. in a form satisfactory to the Chief Administrative Officer; 6. That staff be authorized to enter into an agreement with Kubota Canada Ltd. and other benefitting end users to recover the above noted project costs; and 7. That the appropriate officials of the City of Pickering be authorized to take the necessary. actions as indicated in this report. · Executive Summary: The City has recently purchased approximately 28 acres of land within the Pickering Innovation Corridor and is in the process of acquiring an additional 22 acres. The City will be selling this land to Kubota Canada Ltd. The subject lands will require servicing to be extended from the terminus point of the municipal services (sanitary sewer and water) that will be provided by the Seaton Landowners. Group, to the site. In order to meet Kubota Canada Ltd.'s schedule,· staff need to initiate this .work immediately and begin the necessary· studies and design to bring the services to the subject lands. 83
84 CAO 04-18 May 14, 2018 .Subject: Municipal Services Design for the · Pickering Innovation Corridor Seaton Community Page 2 Sabourin, Kimble &·Associates Ltd. has extensive experience and in-depth knowledge with the complexity of servicing, required studies and approvals in the Seaton Community. It is a diversified company that can provide the project management and design services for this assignment, in a timely manner, due to its familiarity with provincial and regulatory requirements of the Region of Durham, Ministry of T,ransportation, Ministry of Natural Resources & Fore·stry, · Toronto & Region· Conservation Authority, and Infrastructure Ontario that are applicable to this assignment. It is imperative that the City proceed with this assignment, as the environmental field work is seasonal and needs to commence immediately. · In accordance with Purchasing Policy 10.03 (c) where the professional service assignment is expected to be above $50,000.00 and the initiating Director intends to acquire the services without going through a competitive process, Council approval is required to engage a firm for a professional services assignment. Financial Implications: In early April 2018, the City purchased 28 acres from Infrastructure Ontario (the Province) for the amount of $3,327,419. The purchase and sale agreement includes a clause whereby the City would now become a full member of the Seaton Landowner Group. and would have to fund its share of development costs based on its ownership percentage: The City as a Seaton landowner has received its first cash call in the amount of $36,576. and there may be additional cash calls. When the City sells its land to Kubota Canada Ltd., all of these land associated costs plus legal fees will be added to the purchase price ofthe land. Recommendation 2 is seeking Council approval to hire a consulting firm to assist the City in designing the water and sanitary services from the border of the Pickering Innovation Corridor lands to the Kubota Canada Ltd. site at an estimated cost of $600,000 plus HST. This is phase 1 of the project's cost. Phase 2 expenditures will be based on construction costs related to bringing water and sanitary services from the Pickering Innovation Corridor border to Kubota Canada Ltd. with a preliminary estimated cost of approximately $4.0 million plus HST. After the project has been designed and tendered, staff will b.e bringing a report to Council for the awarding of the construction costs. The 2018 capital budget for'the Pickering Innovation Corridor land cost is $6.0 million and the capital project description includes "development servicing costs" (Capital Budget Book binder, page 132) and therefore this project falls within the Council approved project's scope. The development servicing costs will be recovered from future landowners who are benefiting from these services. Kubota Canada Ltd. will reimburse the City for-its share of these services plus an administrative fee that will also be charged to reflect the City's "cost of money" and staff time. The Kubota Canada Ltd. project represents a large up front financial investment for the City. However, when measuring and/or evaluating the project risks, Council should also take into consideration the direct and indirect economic benefits. A very preliminary estimate of the City'& share of the property taxes is approximately $300,000 per year (the final design of the buildings will determine the project's. assessment value). The Region of Durham will benefit from this project by receiving an estimated $550,000 in property taxes with. limited staff effort or financial risk. This
CAO 04-18 May 14, 2018 Subject: Municipal Servic"es Design for the Pickering Innovation Corridor Seaton Community Page 3 project and corresponding employment will be a catalyst for the development of the rest of the corridor lands that in,.turn will lead to additional non-residential property tax revenues. Discussion: In April of 2018, the City announced 4 major development projects for the Pickering .Innovation Corridor: Kubota Canada Ltd., the Behar Group, Red Crest and Best Homes C~nada. All 4 developments will be situated on the north side of Highway 40?, between Si~eline 26 (future Whites Road) and Sideline 22 (future-Peter Matthews Boulevard). Kubota Canada Ltd. plans to construct a 500,000 square foot industrial building, along with 65,000 square feet of office space for its Canadian Headquarters. Its project team has met with qty officials and has outlined a very aggressive timeline to construct and relocate its operations to Pickering. City staff have also· met with the three other investors to understand their development plans and to coordinate the appropriate project timelines. In order to accommodate the project timelines for Kubota Canada Ltd. and the other users on the north side of Highway 407, the City plans to initiate the appropriate environmental work required by the City, Region of Durham, Ministry of Transportation, Ministry of Natural Resources & Forestry, Toronto & Region Conservation Authority, and Infrastructure Ontario, as well as, the design and cc;mstruction work required to bring the water and sanitary services to the individual lot lines for each user. The Empldyment Lands within the Seaton Community, known as the Pickering· Innovation Corridor, have been identified as a priority for servicing in the Seaton Phase 1 Regional Infrastructure Front Ending Agreement. Construction contracts to provide these services have been tendered and executed and trunk services (water and sanitary sewer) construction has commenced with anticipated completion by the end of 2018. Services to the Employment Lands will be located on the northeast quadrant of the Whites Road/Highway 407 interchange. From that location, local sanitary sewer and water services will need to be designed and constructed eastward toward Sideline 24 in order to provide services to the Kubota site and other lands within the Pickering Innovation.Corridor. Sabourin, Kimble & Associates Ltd. has extensive experience and in-depth knowledge with the complexity of servicing, required studies and approvals in the Seaton Community. It is a diversified company that can provide the project management and design services for this assignment, in a timely manner, due to' its familiarity with provincial and regulatory requirements of the Region of Durham, Ministry of Transportation, Ministry of Natural Resources & Forestry, · Toronto & Region Conservation Authority, and Infrastructure Ontario that are applicable to thi_s assignment. It is imperative that the City proceed with this assignment, as the environmental field work is seasonal and needs to commence immediately. Staff are working with Sabourin, Kimble & Associates Ltd. to receive a detailed proposal outlining the full scope of work ( environmental, geotechnical, transportation, archeological, municipal servicing) and the associated fee. As time is of the essence, staff are recommending that an upset limit of $600,000 plus HST be approved by Council for this assignment. 85
86 CAO 04-18 Subject: Municipal Services Design for the Pickering Innovation Corridor Seaton Community Preparfd· By:/ • / I I' , }~'4;:;?-·~ ·-A'' / .{.,, fl Fiaz Jaaoon Manager, Economic Development & Strategic Projects ----Stan Karwowski, MBA, CPA, CMA Director, Finance & Treasurer TP:jh Recommended for the consideration of Pickering Cu Tony Prevedel, P.Eng. Chief Administrative Officer May 14, 2018 Page 4
December 3, 2018. FILE: 18:400:0#3087 City of Pickering One the Esplanade Pickering, Ontario L 1V 6K7 Attention: Mr. Fiaz Jadoon I ATTACHMENT tt :l. !11 y:;k1l . Manager, Economic Development & Strategic Projects Dear Mr. Jadoon; SUBJECT: CHANGE IN SCOPE OF S,ERVICES. PURCHASE ORDER 180344 tAo I TO REPORT# o;. -t't SABOURIN KIMBLE & ASSOCIATES LTD. CONSULTING ENGINEERS Further to our meeting of November 29, 2018, we are pleased to forward the following summary of the change in service scope to the above-referenced Purchase Order in order to bring the Kubota project to a successful completion: 1. Project Management: Original Budget $240,000 While -it is difficult to forecast the volume of project management services throughout 2019, at the existing rate, there are sufficient remaining fees to provide project management services through June or July at the existing rate of expenditures. However, given th~ project management services are more heavily front-ended and the fact that the external services and Kubota building should be commencing construction by that stage, we feel there is sufficient budget to carry out project management services through to the end of 2019. However, should the budget deplete itself prior to this date, and/or the project carry on beyond 2019, this aspect of the budget can be revisited, 2. Detailed Engineering Design: Orig!nal Budget $160,000 The -original budget was derived using 4.00% of an estimated cost of works of $4,000,000, for the preparation of an updated FSR (1.00%) and detailed engineering design of the_ external services (3.00%). As detailed in our proposal of May 9, 2018, this was to include external municipal services and Kubota Drive and it was further noted that the exact scope of all of the required municipal services had not yet been fully identified. Since that time, the road improvements to Highway No.7 and Sideline_ 24 have been added to the scope. As such, the current cost estimate of municipal services and roads (excluding the possible interim water storage requirements, which can likely be a design/build if required) is approximately $6,000,000. However, we have also discussed the prospect for preparing only an abbreviated FSR update, since the detailed design is proceeding so rapidly. As such, we estimate that we
may only need 0.50% of the cost of works for this component of the assignment, provided that the City can support the abbreviated FSR approach. Revised Budget: 3.50% of $6,000,000 = $210,000 3. Environmental Consulting Services: Original Budget $40,000 No increase in this budget is anticipated at this time. 4. Transportation Consulting Services: Original Budget $75,000 No increase in this budget is anticipated at this time. 5. EA Consulting Services: Original Budget $25,000 No increase in this budget is anticipated at this time. 6. Surveying Services: Original Budget $50,000 As you are aware, we elected to add several additional services to the scope of surveying assignment (both legal and topographical) pertaining to the lands east of Kubota and in conjunction with the lands in between Sidelines 24 and 26. As such, we anticipate an increase in budget of $30,000. 7. Geotechnical Consul~ing Services: Original Budget $0 This scope of services has recently been added to the projects scope. These services could not previously be determined as the availability of existing geotechnical information was unknown, as was the full scope of engineering design, thus geotechnical investigations. The budget to carry out the required Phase 1 ESAs and geotechnical investigations is $80,000. 8. Archeological Consulting Services: Original Budget $0 This scope of services has recently been added to the project's scope: These services could not previously be determined as the scope was unknown. The budget to carry out the required archeological assessments is $15,000. 9. · Geomorphology Consulting Services: Original Budget $0 This scope of services has recently been added to the project's scope for the sewer and watermain crossing of the NHS, and for the design of the Kubota Drive culvert. The budget to carry out the required geomorphology assessments is $15,000.
10. Electrical Consulting Engineering: Original Budget $0 This scope will be required to be added to the project's scope.-This will include · coordination of the hydro pole relocations on Highway No.7 and Sideline 24, the design of the intersection signalizations of Highway ?/Sideline 24, and Sideline 24/Kubota Drive, and the design of all necessary street lighting on Highway No.7, Sideline 24 and Kubota Drive. The budget to carry out the required electrical consulting engineering is $40,000. 11. Landscape Architecture: Original Budget $0 This scope will be required to be added to the project's scope. This will include the detailed landscape architectural design of the Stormwater Management pond -and the street trees on Kubota Drive. The budget to carry out the required landscape architecture design work is $20,000. 12. Cost Sharing Consulting Services: Original Budget $0 This scope will be required to be added to the project's scope. While standard cost estimating was included in the-project management services and all accompanying disciplines, the cost sharing analyses were not. The budget to carry out the required cost sharing consulting services can be a very difficult one to estimate, however, we suggest a budget of $20,000 would be appropriate, unless the calculations and negotiations become protracted. SUMMARY: To summarize all of the above-detailed scopes and budgets, we provide the following table: Consulting Service Original Proposed Budget Increase Budget Updated Budget Project Management $240,000 $240,000 $0 Municipal Engineering Design 160,000 210,000 50,000 Environmental Consulting 40,000 40,000 0 Transportation Consulting 75,000 75,000 0 EA Consulting 25,000 25,000 0 Survevino Services 50,000 80,000 30,000 Sub-Total Original Purchase Order $590,0Q0 $670,000 $80,000 Geotechnical Consulting $0 $80,000 $80,000 Archeological Consulting 0 15,000 15,000 . Geomorphology Consulting 0 15,000 15,000 Electrical Consulting 0 40,000 40,000 Landscape Architecture 0 20,000 20,000 Cost Sharing Consulting 0 20,000 20,000 Sub-Total Additional Services $0 $190,000 . $190,000 Grand Totals $590,000 $860,000 $270,000
We also suggest that the City include a contingency allowance for any other unknowns that may arise in the coming months. In closing, we trust you will find this material complete and in order. However, if you have any questions, comments or further requirements, please contact the undersigned. Yours very truly, SABOURIN KIMBLE & ASSOCIATES LTD. Richard T. Sabou.rin, P. Eng. RTS/jm cc: City of Pickering -Mr. Richard Holborn, P. Eng. Municipal Engineering Solutions -Mr. John Bourrie, P. Eng.